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Details fiends will note the rather lovely circularity here, for each of the limbs (other than “financial contracts for differences”) employs the expression “[[derivative contract]]”. Could something that falls outside the scope of paras 4-10, but also arguable falls within it — a transferable security with an embedded derivative, like a [[credit-linked note]], for example — count as a “[[derivative contract]]”? The [[European Commission]] draftspersons are occasionally cavalier in their looseness with words you wish they’d been careful about. Unintended consequences hover over either interpretation. | Details fiends will note the rather lovely circularity here, for each of the limbs (other than “financial contracts for differences”) employs the expression “[[derivative contract]]”. Could something that falls outside the scope of paras 4-10, but also arguable falls within it — a transferable security with an embedded derivative, like a [[credit-linked note]], for example — count as a “[[derivative contract]]”? The [[European Commission]] draftspersons are occasionally cavalier in their looseness with words you wish they’d been careful about. Unintended consequences hover over either interpretation. | ||
Elsewhere — in Article 2(7) of [[EMIR]] — the Commission speaks of “[[OTC derivative]]s” or “[[OTC derivative contract]]s” — to distinguish them from “exchange-traded derivatives”, which it defines as: | Elsewhere — in Article 2(7) of [[EMIR]] — the Commission speaks of “[[OTC derivative]]s” or “[[OTC derivative contract]]s” — to distinguish them from “exchange-traded derivatives”, which it defines as: | ||
{{quote|a [[derivative contract]] the execution of which does not take place on a [[regulated market]] as within the meaning of Article {{mifid2prov|4(1)}}(14) of [[MiFID]] or on a third-country market considered as equivalent to a [[regulated market]] in accordance with Article {{ | {{quote|a [[derivative contract]] the execution of which does not take place on a [[regulated market]] as within the meaning of Article {{mifid2prov|4(1)}}(14) of [[MiFID]] or on a third-country market considered as equivalent to a [[regulated market]] in accordance with Article {{mifidf2prov|19(6)}} of [[MiFID]]}} | ||
The implication here is that those taking place on a [[trading venue]] (such as an [[OTF]] or [[MTF]]) which is not a [[regulated market]] nonetheless count as [[OTC derivative]]s. | The implication here is that those taking place on a [[trading venue]] (such as an [[OTF]] or [[MTF]]) which is not a [[regulated market]] nonetheless count as [[OTC derivative]]s. | ||